Well, the rising wedge in the S&P 500 I spoke of last week did break to the downside on the return of volume as expected. With the return of volume I have seen many previous breakouts return to or below their breakout point (TIE for example) . Other stocks are hovering at support but are not oversold on their relative strength (CME for example). We have what looks like a long term top in all the market averages coupled with a seasonally weak period for the market. Most previously leading stocks are off their highs but can move potentially much lower without falling much from their current levels (by breaking support). In short (no pun intended) the market averages look like houses of cards ready to make a substantial move lower. I believe support levels will be broken in the next two weeks, most likely after the triple witch (op ex) friday. But I wouldn't discount a meltdown next week even though there may be a fair amount of end of quarter support (many funds would like to see their books show the recent gains). I have talked alot about GRMN and CME lately, lets take a step back and look at their weekly 2 year charts (like the SPY chart above):
As you can see in both of these charts there is massive potential downside in these former IBD favorites that have put in a top. I will be looking for opportunities to add to my long term short positions in both of these next week. The ideal entry in CME is 450-460$, for GRMN anywhere up to 45$ is good. Based on their charts I think the time is right to enter both of these for the impending bear market.
Well, the rising wedge in the S&P 500 I spoke of last week did break to the downside on the return of volume as expected. With the return of volume I have seen many previous breakouts return to or below their breakout point (TIE for example) . Other stocks are hovering at support but are not oversold on their relative strength (CME for example). We have what looks like a long term top in all the market averages coupled with a seasonally weak period for the market. Most previously leading stocks are off their highs but can move potentially much lower without falling much from their current levels (by breaking support). In short (no pun intended) the market averages look like houses of cards ready to make a substantial move lower. I believe support levels will be broken in the next two weeks, most likely after the triple witch (op ex) friday. But I wouldn't discount a meltdown next week even though there may be a fair amount of end of quarter support (many funds would like to see their books show the recent gains). I have talked alot about GRMN and CME lately, lets take a step back and look at their weekly 2 year charts (like the SPY chart above):
As you can see in both of these charts there is massive potential downside in these former IBD favorites that have put in a top. I will be looking for opportunities to add to my long term short positions in both of these next week. The ideal entry in CME is 450-460$, for GRMN anywhere up to 45$ is good. Based on their charts I think the time is right to enter both of these for the impending bear market.
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